State pension second worst in Europe

THE State pension in Ireland is the second worst in Europe after Britain.

As a result, up to 900,000 Irish workers — nearly half theexisting workforce — are heading into a bleak retirement.

The State pension provides just 32.5% of the average industrial wage compared with 60% for many European countries, apart from Britain. At €200 per week for a single person that is more than €3 below the poverty line.

However, a spokesman for the Pensions Board said the reports by the OECD and Aon Consulting were not comparing like with like. When private pension cover is included, then the situation in Ireland is significantly better than the reports suggest, he said.

However, he acknowledged that the basic figures on the State pension convey a serious problem for the near one million who are reliant on the State to provide them with enough to live on in their old age.

Private pension cover means that significant number of Irish people will be substantially better off at retirement age because of the pension cover provided by employers, or paid for by themselves.

The Aon Consulting findings just published said the inadequacy of the State system is “beyond question”.

Those comments were attributed to the British system, but they apply almost equally to the Irish State pension.

The earlier OECD report said that Ireland and New Zealand were the only two countries in the OECD without some form of mandatory occupational pension.

With New Zealand thinking of going the mandatory route Ireland may soon be the only of the 32 OECD states not to have a compulsory private pension scheme in place.

However, the Pensions Board has in the past urged caution regarding mandatory pensions.

They fear such a move could set the bar too low and people might only make limited provisions for themselves.

Its spokesman also said the debate on pensions is still evolving in Europe.